65% of Financial Firms Changed Regulatory Reporting: Survey

Though regulatory reporting is a key requirement for any financial services company, inefficiencies and errors has prompted 65 percent of the companies to change their reporting in the last 12 months, according to a survey conducted by Cappitech.

The Israeli company surveyed and gathered data in autumn 2020 from 89 respondents consisting of banks, brokerages, asset managers, hedge funds, corporates, and other institutions globally.

Published on Tuesday, the results highlighted that new and changing regulations in many jurisdictions and the effect on Coronavirus in the industry are also affecting the companies and their compliance with regulatory reporting.

Another event that affected many companies directly or indirectly was the exit of CME and Deutsche Borse from the transaction and regulatory reporting market. Cappitech itself was using CME’s services and completed the first vendor-led trade reporting data without utilizing CME’s infrastructure in August.

Lapses across the Industry

The report highlighted that market reconciliation increased significantly as 67 percent of the companies are now performing required tasks, up from 55 percent last year.

Moreover, the regulators are focusing on helping companies with their reporting as 54 percent of the companies have received regulator feedback in the period, compared to merely 32 percent last year.

The survey further found out that as many as 66 percent of the market players did not implement any systematic method to monitor the best Execution Execution Execution is the process during which a client submits an order to the brokerage, which consequently executes it resulting in an open position in a given asset. The execution of the order occurs only when it is filled. There is typically a time delay between the placement of the order and the execution which is called latency.In the retail FX space, reliable brokers always strive to deliver best execution to their clients in order to maintain a solid business relationship with them. This is a co Execution is the process during which a client submits an order to the brokerage, which consequently executes it resulting in an open position in a given asset. The execution of the order occurs only when it is filled. There is typically a time delay between the placement of the order and the execution which is called latency.In the retail FX space, reliable brokers always strive to deliver best execution to their clients in order to maintain a solid business relationship with them. This is a co Read this Term. Despite this being a requirement, it went up from last year’s 61.4 percent.

Additionally, the regtech company’s survey identified that 68 percent of the participants are aware of a no-deal Brexit, while 71 percent of them have already decided on migration measures.

Operating costs were also among the major concerns for the companies, especially with the impact of the pandemic. Cappitech told Finance Magnates that 44 percent of the survey participants cut their budget while 28 percent were concerned about operating with reduced resources.

Furthermore, 46 percent of the companies revealed that controlling regulatory costs were among their strategies of cost-cutting.

"The Regulation Regulation Like any other industry with a high net worth, the financial services industry is tightly regulated to help curb illicit behavior and manipulation. Each asset class has its own set of protocols put in place to combat their respective forms of abuse.In the foreign exchange space, regulation is assumed by authorities in multiple jurisdictions, though ultimately lacking a binding international order. Who are the Industry’s Leading Regulators?Regulators such as the UK’s Financial Conduct Authority ( Like any other industry with a high net worth, the financial services industry is tightly regulated to help curb illicit behavior and manipulation. Each asset class has its own set of protocols put in place to combat their respective forms of abuse.In the foreign exchange space, regulation is assumed by authorities in multiple jurisdictions, though ultimately lacking a binding international order. Who are the Industry’s Leading Regulators?Regulators such as the UK’s Financial Conduct Authority ( Read this Term covers all different finance companies which makes reporting different, but, if there's consensus on how to report for specific product or source of information among similar funds (say macro hedge fund), then it can apply pressure to the industry to provide [a] consistent set of data," a respondent of the survey said.

“Survey respondents and our clients appear to be united in their desire to drive efficiency and accuracy while maintaining costs and reducing longer-term risks as a result of regulatory or market changes. Increased engagement with regulators, TRs, ARMs, and vendors all working together can contribute to this improvement in reporting efficiency. Certainly, taking the results of this survey Cappitech will continue to aim to meet as many of these concerns as we roll out new services,” Cappitech CEO, Ronen Kertis said in a statement.